IMPORTANT POINT
Section 31 of the Recovery of Debts Due to Banks and Financial Institutions Act contemplates not only the transfer of a suit but also transfer of a proceeding which may be other than a suit, like an execution application.

Headnote:(i) Recovery of Debts Due to Banks and Financial Institutions Act, 1993-Sections 31 and 31-A-Transfer of pending cases- Proceeding -Meaning of-Cause of action-Includes execution application-Decree obtained and execution petition filed-Act came into force-Trial Court/executing Court transferring execution petition to Debt Recovery Tribunal-High Court holding that execution proceedings could not be transferred-Not tenable-Section 31 contemplates not only transfer of a suit but also transfer of a proceeding which may be other than a suit, like an execution application.
       A bare reading of Section 31 shows that execution application being a proceeding pending in a Civil Court when the Act came into force was liable to be transferred to the Tribunal because the amount for which the execution application had been filed as per the decree which had been passed, was over of Rs. 10 lakhs. (Para 6)
       Learned counsel for the respondents submitted that the use of the words cause of action in Section 31 indicated that it is only pending suits which could be transferred. We are unable to agree with this submission. The words cause of action are preceded by the words being a suit or proceeding . Section 31 contemplates not only the transfer of a suit but also transfer of a proceeding which may be other than a suit, like an execution application. Understood in this context, the words being a suit or proceeding the cause of action whereon it is based .... would mean that in the case of an execution application if the decree is for more than Rs. 10 lakhs, then that is the cause of action or the reason for an application for execution being filed before the Tribunal. Section 31A is clearly applicable in the present case. The decree was passed by court before the commencement of the Amendment Act and the same has not yet been executed. Atleast after the amendment, it is only the Tribunal which would have the jurisdiction of entertaining the application for execution of the decree inasmuch as the amount due for which the decree was sought to be executed is over Rs. 10 lakhs. (Paras 7 & 9)
       (ii) Recovery of Debts Due to Banks and Financial Institutions Act, 1993-Sections 31 and 34-Transfer suits-Suit for Recovery of Rs. 6,19,250 with interest @ 12½ % filed prior to coming in force of Act-Suit decreed and execution application filed-Act came into force while-Trial Court/execution Court transferring application to Debt Recovery Tribunal-High Court holding since original decree was for Rs. 6,119,250 DTR would have no jurisdiction-Not correct-Decretal amount including interest amounted to Rs. 12,91,398-Execution application being for more than Rs. 10 lakhs DTR has jurisdiction in view of Section 34 of Act. (Para 9)

JUDGMENT

Kirpal, J.-Special leave granted.

2. The appellant on 26th August, 1988 filed a suit for recovery of Rs. 6,19,250/- in the Civil Court. By judgment dated 16th February, 1994, the trial Court decreed the suit for the aforesaid amount with interest at the rate of 16-1/2 per cent per annum from the date of filing of the suit till the recovery of money. On 21st December, 1994, an execution application was filed by the appellant before the Court of Civil Judge, Dasuya. According to the appellant, an amount of Rs. 12,91,398/- being the principal amount of Rs. 6,19,250/- plus interest thereon as per the decree, had become due and payable and it was in respect of this amount that execution was sought.

3. In the meanwhile on 25th June, 1993, the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as "the Act") had come into force. On 30th August, 1994, a Tribunal was set up in Jaipur and it was given jurisdiction to decide claims even with regard to those arising in the State of Punjab. On 18th February, 1997, the appellant moved an application before the Civil Court, Dasuya for transfer of the execution proceedings to the Debts Recovery Tribunal, Jaipur. This application was allowed and the trial Court ordered the transfer of the execution proceedings to the Debts Recovery Tribunal, Jaipur.

4. The respondents thereupon filed a revision petition in the High Court. By judgment dated 1st April, 1999, the High Court came to the conclusion, while reversing the decision of the trial Court, that the execution proceedings could not be transferred and it is only the Civil Court, which had passed the decree, which could execute the same. Hence, this appeal by special leave.

5. The point in issue is no longer res integra. After analysing the provisions of the Act, this Court in Allahabad Bank v. Canara Bank & Anr.1 held that the word proceeding in Section 31 of the Act would include an execution proceeding pending before a Civil Court before the commencement of the Act. It was further held that the suits and proceedings so pending would stand transferred to the Tribunal. This conclusion emanated from the fact that the definition of the word debt contained in Section 2(g) of the Act, inter alia, meant any liability which was due to a bank and was payable under a decree or order of a Civil Court. The decretal amount being a debt as envisaged by Section 2(g) would clearly attract the provisions of Sections 17 and 18 of the Act which give exclusive jurisdiction to the Tribunals constituted thereunder to decide the questions regarding recovery of debts due to the banks and financial institutions. Section 31 which deals with transfer of cases reads as under :

"31. Transfer of pending cases.-(1) Every suit or other proceeding pending before any court immediately before the date of establishment of a Tribunal under this Act, being a suit or proceeding the cause of action whereon it is based is such that it would have been, if it had arisen after such establishment, within the jurisdiction of such Tribunal, shall stand transferred on that date to such Tribunal.

Provided that nothing in this sub-section shall apply to any appeal pending as aforesaid before any court.

(2) Where any suit or other proceeding stands transferred from any court to a Tribunal under sub-section (1),-

(a) the court shall, as soon as may be after such transfer, forward the records of such suit or other proceeding to the Tribunal; and

(b) the Tribunal may, on receipt of such records, proceed to deal with such suit or other proceeding, so far as may be, in the same manner as in the case of an application made under Section 19 from the stage which was reached before such transfer or from any earlier stage or de novo as the Tribunal may deem fit."

6. A bare reading of the aforesaid Section shows that execution application being a proceeding pending in a Civil Court when the Act came into force was liable to

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2000 Supreme(SC) 1237

IMPORTANT POINTSection 31 of the Recovery of Debts Due to Banks and Financial Institutions Act contemplates not only the transfer of a suit but also transfer of a proceeding which may be other than a suit, like an execution application.

Cases Referred (1)

IMPORTANT POINT
Section 31 of the Recovery of Debts Due to Banks and Financial Institutions Act contemplates not only the transfer of a suit but also transfer of a proceeding which may be other than a suit, like an execution application.